S&P Global Enhances Climate Credit Analytics to Assess Physical and Transition Risks
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Model suite now includes S&P Global Sustainable1 data enabling further assessment of aggregated impact of climate risk
S&P Global Market Intelligence and Oliver Wyman has announced the enhancement of the S&P Global Market Intelligence Climate Credit Analytics solution to include both climate-related physical and energy transition risk. The addition of S&P Global Sustainable1 data providing information on the physical risk exposure and related financial impact for over 20,000 companies mapped against a range of seven climate change related hazards across a range of four CMIP6 Shared Socioeconomic Pathway (SSP) climate change scenarios will support clients as they seek to understand and manage the physical and financial exposure of corporates and portfolios to climate change.
Developed through a collaboration between S&P Global Market Intelligence and Oliver Wyman, Climate Credit Analytics was launched in June 2021 to help financial institutions and corporations assess how a changing climate and the transition to a low-carbon economy will impact the creditworthiness of their counterparties and investments. The solution translates climate scenarios into scenario-adjusted financials and scores at the company level by combining S&P Global Market Intelligence’s advanced Credit Analytics risk models and unique industry-specific datasets with Oliver Wyman’s industry-leading climate scenario and stress testing capabilities.
Since then, the offering has also expanded to incorporate:
- New climate scenarios, including Phase III scenarios published by the Network for Greening the Financial System (NGFS) and regulatory scenarios from the European Central Bank, Monetary Authority of Singapore and the U.S. Federal Reserve
- Additional datasets and disclosures including company specific transition targets that provide differentiations in outcome based on a company’s stated energy transition ambitions
- Sector specific nuances including automotive industry energy transition forecasts from S&P Global Mobility and commodity asset cost curves from Platts, part of S&P Global Commodity Insights
“With the increased frequency of climate-related events, the continued enhancement of this solution is particularly significant as companies seek to evaluate the impact of climate on their businesses, counterparties and investments,” said Whit McGraw, Head of Credit and Risk Solutions, S&P Global Market Intelligence. “Our robust model suite and tailored approach to sectors, enhanced by the S&P Global acquisition of The Climate Service and merger with IHS Markit, provides greater granularity for regulatory climate stress testing and scenario analysis, enabling users to report to stakeholders with confidence.”
“This new release will serve banks, insurers, asset managers, asset owners and corporate risk managers to quantify climate risks in an even more thorough manner and thereby more readily integrate into business decisions and client engagement,” said John Colas, Partner and Vice Chairman of Financial Services for the Americas at Oliver Wyman.
Since its launch in June 2021, Climate Credit Analytics has been leveraged for regulatory climate stress testing by financial institutions in various jurisdictions globally as well as for the purposes of climate scenario analysis aligning to the recommendations of the Task Force for Climate Related Financial Disclosures.